On the private side, health and wellness providers are realizing that they can’t survive without support from federal, state and local governments. At the same time, the public sector understands that it doesn’t have enough facilities, beds and capabilities to handle this kind of disease outbreak without the private sector’s help.
Public-private partnerships (P3s) are one of the most promising models to finance innovations and combine public-interest and private-sector research and development. The coronavirus pandemic is highlighting the potential of P3s by showcasing the need for collaboration and the power of teamwork.
Where do P3s fit? By working together when healthcare delivery challenges are too great for each to handle on their own, the public and private partners are able to share in the risks, responsibilities and positive outcomes, leveraging each other’s resources, strengths and assets.
The Time is Right for P3s in Healthcare
The pandemic is highlighting the potential of public-private partnerships (P3s) to bring together diverse groups to address issues of population growth, rising healthcare costs and enhanced expectations for health service delivery.
As a hypothetical, consider the California state government, which has tens of thousands of employees. The state agencies may need to test their workers in Sacramento for COVID-19 every day. The existing healthcare system isn’t robust enough to offer the necessary facilities, equipment and supply chain. To make it work, the state could partner with a private healthcare system like Kaiser Permanente, Dignity Health or Sutter Health — or all three — to utilize their facilities. The private companies could quickly and efficiently embed facilities in the state offices to handle the daily routines. In this scenario, a P3 offers a time-tested strategy to bring the public and private sectors together, with the private side offering the added value of investment funds and expertise.
Public schools would benefit from a similar scenario. Districts could partner with private healthcare systems to develop onsite medical clinics to ensure the daily safety of students and staff. By working together, the school district benefits from a healthier student body and staff, and the private healthcare system can serve a wider patient base and develop lifelong relationships.
The rapid evolution of rules and regulations in the healthcare field that occurred in 2020 is making P3s even more attractive. As the pandemic grew, the federal government rushed to add flexibility in areas like telemedicine. With Medicare and Medicaid providing extensive reimbursement for telehealth services, medical professionals are developing better ways to deliver full telehealth/home-care services to patients.
We expect that the new federal administration will embrace more flexible rules on a permanent basis, smoothing the progressive design-build process for major healthcare projects. Any new regulatory framework will likely highlight the advantages of collaborating and addressing the interests of multiple stakeholders, providing a natural foundation for P3s.
The P3 process supports flexibility and adaptability, which is crucial as we work to ensure that our healthcare systems can respond to current and future outbreaks in a timely manner. A P3 also offers distinct advantages over traditional financing arrangements. Budget schedules are more reliable, and satisfaction metrics can restrict compensation until segments of the project are delivered as contracted.
It’s natural for clients to worry about the cost and complexity of P3s. But we know from experience that, while P3 arrangements might appear at first to be more expensive, the involvement of multiple agencies helps to ensure that the long-term ROI is substantial and outweighs the initial cost.
The key to managing the complexity is to create active partnerships, with all parties understanding each organization’s challenges and determining how to turn problems into opportunities. At LPA, we’ve worked on a wide variety of P3 projects, including the redevelopment of the County of Orange Civic Center, one of the largest P3s in California. In every case, no matter what the scale, we were able to transparently coordinate the scope of work and define the objectives, goals and guiding principles from the beginning. On healthcare projects, our gaps analysis — understanding what has worked and what has failed during the pandemic — will offer a roadmap toward improved, lean systems. It provides opportunities for building capacity within the healthcare systems, as well as improvement in the quality of care between the partners.
COVID-19 is a wake-up call telling our healthcare systems that they must do better to prepare for crises. We should anticipate that the novel coronavirus, or some form of it, will be with us for at least the next 10 years. We will have to address not only this pandemic but the potential for future pandemics and other outbreaks.
It will take all of us, from both the public and private sides, to meet this challenge. It’s clearer than ever that we can’t succeed without each other. In many ways, P3s meet this moment: They unite us into teams with universal goals and build a solid base for a healthier future.
